CANDIES Stocks All Have Earnings Momentum

On yesterday’s Mad Money show, host Jim Cramer again discussed his CANDIES stocks with his viewers. Mr. Cramer was careful to point out that these seven stocks are not just momentum plays or stocks whose price just happens to be moving higher. These high growth stocks all have earnings momentum! Wall Street is continually revising their earnings estimates higher. These upward revisions are pushing the stock prices even higher.

Cramer pointed out that the earnings estimates for all of seven the CANDIES stocks have increased 30 – 50% year/year. The only exception was Deckers (DECK: 87.25 0.00%), which only increased by 15%. However, Cramer says “the analysts are wrong” about Deckers, and the stock is up 118% since last year.

A review of the seven CANDIES stocks:

C – Chipotle Mexican Grill (CMG: 374.02 0.00%)

A – Apple (AAPL: 476.68 0.00%)

N – Netflix (NFLX: 124.00 0.00%)

D – Deckers (DECK: 87.25 0.00%)

I – Intuitive Surgical (ISRG: 491.915 0.00%)

E – Express Scripts (ESRX: 50.78 0.00%)

S – Salesforce.com (CRM: 123.80 0.00%)

On the other end of the spectrum is Research in Motion (RIMM: 16.49 0.00%). This was formerly one of Cramer’s favorite picks, but stock has been delivering disappointing earnings growth. As a result RIMM shares are down 24%, but Cramer still doesn’t think the stock is cheap. Most Wall Street analysts agree and are suggesting that the stock price will go even lower.

It seems like Research in Motion may be the next Nokia (NOK: 5.21 0.00%) or Motorola (MOT: 0.00 N/A). Both stocks have substantial declines in earnings momentum and as a result they are now trading near their 52-week lows. Research in Motion is losing market share to Apple (AAPL: 476.68 0.00%) and doesn’t seem to have any product on the horizon to compete effectively with the iphone.